Cash-In-Advance Constraint on R&D in a Schumperian Growth Model with Endogenous Market Structure
2013/03/05
研討會日期 : 2013-03-05
時間 : 14:30
主講人 : Professor Lei Ji
地點 : Conference Room B110
演講者簡介 : Lei Ji received her Ph.D. in Economics from North Carolina State University in 2010. She is currently serving as Assistant Professor of Economics at Shanghai University of Finance and Economics. Her research field is in economic growth and development, international trade, macroeconomics, industrial organization and econometrics.
演講摘要 : This paper explores the effects of monetary policy on the number of firms, firm market size, and economic growth in a Schumpeterian growth model with endogenous market structure and Case-In-Advance (CIA) constraints on two types of research and development (R&D) investment – in-house R&D and entry investment. The endogeneity of market structure leads to substantially different monetary implications from those in the existing literature without market structure. We show that if only in-house R&D (quality improvement-typed R&D) is subject to the CIA constraints, raising the nominal interest rate increases the number of firms, but decrease the firm size, employment, and out-put growth. In contrast,, if entry investment (variety expansion-typed R&D) is subject to the CIA constraint, a higher nominal interest rate gives rise to the opposite effects. In a Lucasian economy where only consumption is subject to the CIA constraint, we find that money superneutrality holds true due to the scale-invariant property of our models. Besides, our model generates rich transitional dynamics in response to a change in monetary policy, when R&D/entry is restricted by a CIA constraint.
